5 Tips for Aspiring Entrepreneurs and Business Owners
More and more, women are using the economic downturn as an opportunity to start their own businesses. In fact, the National Association of Women Business Owners
is reporting a
surge in membership in some parts of the country. Experts predict that within the next decade, female-owned small businesses will grow from creating 16% of the US economy's jobs to creating more than one-third of jobs
What is driving this increase in women entrepreneurs? Some women may be using the event of a layoff or buyout package to pursue an entrepreneurial dream. Others could be re-entering the workforce by starting their own venture. Many believe, as I do, that if you have a great idea and some capital, a recession is the perfect time to launch a new business.
This past fall, I took the plunge and became an entrepreneur after a more than decade-long career with a business research company. I purchased a franchise of Mom Corps
, a staffing firm that places top-tier professionals in flexible work arrangements. Although I am still early in my new career as an entrepreneur, I would advise other aspiring entrepreneurs to do the following:
1. Talk to other entrepreneurs to get a sense of all of the different options that are out there for you to launch and structure a successful business. Plus, being an entrepreneur can be lonely and it will be very helpful for you to build a network of other entrepreneurs to bounce ideas off of. I found the book 50 Entrepreneurs useful in helping me understand what the life of an entrepreneur is like.
2. Research your market. Take the time to assess market demand for your product, to understand who the competition is, and to decide if your market is growing or shrinking. You'll want to do enough research to answer those questions, but don't succumb to "analysis-paralysis," either. At the end of the day, you'll need to make a gut decision on whether to launch a new venture. In my case, I saw a great market opportunity for the Mom Corps concept – more professionals need flexibility and more companies need a flexible workforce. Plus, in my market research I discovered that the staffing industry tends to be one of the first to recover in a recession.
3. Manage the risk. Opening a new business is always risky, so think of creative ways to gain access to capital and to keep your costs low and/or variable. One of the best ways to manage the risk of a new business is to launch it while still keeping your day job. I am managing the risk of my new business by having plenty of capital on hand (courtesy of diligent savings and a buyout package) and by purchasing a franchise of a proven business that comes along with a support system of the Mom Corps founders and other franchise owners. In addition, I have started this business from my home, which helps me keep my overhead costs down and frees up more capital to invest in marketing. Apparently, I am not alone. There has been an explosion of successful home-based companies the past few years.
4. Have passion for your product. Starting a new business is hard. It can take long (and lonely) hours and requires a leap of faith that you will be successful. If you are passionate about your product or service, that passion will fuel you through times of uncertainty and will make you a much better representative of your company.
5. Have a plan. I don't believe you need to create a full business plan (unless you will be applying for credit or seeking investors). But you should at least have some idea of who you will market your product to, how you will create the product, what investment is required, and how much you need to sell and at what price in order to make money. Your business plan will constantly change as you learn more about the market and uncover new opportunities, but it's good to have some sense of what you need to do to be successful. I am a fan of a having a six-week operating plan (with success metrics), a one-year revenue and market penetration goal, and a five-year dream for your business.
Of course, every entrepreneur's story and advice is going to be different, which is what makes opening your own business so exciting. Some other resources that you should consult are:
- SCORE – Get free advice on running a small business from volunteer business professionals
- National Association of Women Business Owners - Members can network with other women business owners, access resources and training to help grow their businesses, and stay abreast of trends affecting small business owners.
- Small Business Administration - Access tools and services to develop your business plan, seek capital and grow your business.
Eisha Armstrong is the Regional Owner of Mom Corps for Cincinnati, Ohio. You can follow her business at www.momcorpscincy.com.